On first viewing, the revenue numbers look like a big miss from initial targets ($60 m achieved vs $90 m initial target). The slippage in time-frames is largely out of the hands of Fluence and appears to be related to customer legal and financial delays, rather than on project execution. We saw the example of the Mexican BOT project, which has slipped due to government changes to laws around PPPs, but has now been approved for around April 2018.
The main positive is that there has been a
large growth in bookings in 2017 of approximately 51% over 2016. This looks to come largely from Nirobox, RWL Italy and RWL Argentina contributions.
In 2018 we have the upside Emefcy MABR & SUBRE sales contributing to growth in China and beyond. WaaS or RaaS contracts could also start factoring in. Nirobox, RWL Italy & RWL Argentina look like they are increasingly able to leverage their dominant positions in various markets leading to increasing distribution and sales in other countries.
The $100 m African contract in negotiation provides some serious upside in 2018/2019 if won, which appears highly likely.
The PDVSA contract should fully close in 2018. However, it appears that there is some financial risk in the monies held. $95m USD equivalent in Argentine Pesos was received (and invested in short term instruments) in 2015, but there has been some serious weakening vs the US dollar. There was only $36 m in deferred revenue left on the balance sheet which represented work left to be completed in 2017/2018.
The other interesting contribution comes from currency. Most project values are announced in USD equivalents at date of contract award. However, anywhere from 6 to 30 months can pass by the time the project has been completed. Fluctuations in currency could mean that a $10 m USD awarded in Argentina in 2017, might only be worth the equivalent of $5 m USD at the time of payment and recognition on the balance sheet once converted to USD. This can also work the other way around. But it might be hard to compare the values of bookings in 2017 to the balance sheet in 2018 if you are trying to account for every dollar promised.
Very lumpy revenue comes with our current project mix. The move towards containerised solutions and a target 6 week turnaround time will help to smooth out revenue recognition, as will recurring revenue from the BOT projects or RaaS/SaaS contracts.
$150 m USD should be an achievable target in 2018.
A lot depends on how fast the Chinese partners move to adopt, and which specific partners come onboard first. Most investors are waiting for CGGC as the game-changer, but Jinzi, Wuxi, Zhejiang Tiandi, QSY or Sinorichen are all potential billion dollar partners over 5 years. Which other potential partners are still in negotiations and will they sell in 2018? Also, how fast will any partners adopt and push SUBRE? SUBRE deployments at $4 to 5 million USD each could change revenue targets very quickly.
What will the push of sales of MABR/SUBRE into the US look like if Stanford University trials of MABR are successful?
Update - July 12th
$55.6 m - New 2017 bookings
$74.7 m - Planned 2017 revenue - 83% of target
$20.1 m - Revenue achieved 2017 ytd (7.8 m @ March 31st)
$54.6 m – Backlog due 2017
$28.3 m - Backlog due 2018/2019
View attachment 887171
Update - July 31st
$65 m – Planned 2017 revenue
$20.1 m – Revenue achieved 2017 ytd (unable to determine increase over July 12th)
$44.9 m - Backlog due 2017 (9.7 m slippage into 2018)
$38 m – Backlog due 2018/2019
View attachment 887174
Update - Dec 19th
$107.6 m - Total new bookings 2017
$60 m - Total Revenue predicted 2017
$95 m - Year End Backlog
$75 m – Backlog due 2018
$20 m – Backlog due 2019/20
View attachment 887177
Breaking Down 2017
Performance 1st Half 2017
$55.6 m – New 1H 2017 bookings
$20.1 m – Rev achieved 1H 2017 (7.8 m to March 31st)
$82.9 m - Backlog pending
Performance 2nd Half 2017
$52 m – New 2H 2017 bookings
$39.9 m – Rev achieved 2H 2017
$95 m - Backlog pending
51% increase in total bookings over 2016
Revenue Flat
15% increase in Year End Backlog
